Poverty ‧ Masters


Leo Goodstat

Hong Kong continues to rank among the most successful financial and commercial centres in the world. Its economy in 2012 had expanded by more than 53 per cent since 1998. The government’s reserves are remarkably high by international standards and have continued to climb.

This prosperity has benefitted only a small and declining proportion of it people. Income inequality is among the worst in the world and has deteriorated significantly over the last 20 years. Poverty has become a prominent feature of life in Hong Kong for the first time since the 1950s.

“Poverty in the Midst of Plenty” is a two- year research project which asks: who is to blame and why does Hong Kong tolerate this shameful situation? Its findings are to be published in autumn 2013.

Shameful Policies

In 2005, over a million individuals (15 per cent of the population) were classified officially as living in poverty. The blame for this shameful situation belongs, almost entirely, to the serious misconceptions and miscalculations of official policy-makers and their business ‘partners’ throughout the last 20 years. In addition, the struggle for the survival of Hong Kong’s unique way of life has taken priority over social advocacy.

Tung Chee Hwa wrongly believed that Hong Kong was no longer competitive and that budget austerity was the only remedy. In fact, labour productivity has outstripped most advanced countries in this century and has risen three times faster than wages. Tung’s economic strategy undermined consumer and investor confidence and prolonged the recession that started in 1998. His successor Tsang Yam-kuen’s response to the deteriorating environment faced by Hong Kong’s manufacturing base in Guangdong from 2006 was costly and ineffective. Both men were committed to privatising and outsourcing public services. This policy did not increase either quality or efficiency and created new opportunities for unfair and unlawful treatment of the work force. The privileged consideration given to business interests proved wasteful and permitted misuse of public funds and facilities.

The needy and vulnerable suffered overt discrimination. The elderly who had to depend on social security were depicted as the victims of unfilial o spring, and the unemployed drawing CSSA benefits were stereotyped as shiftless spongers on the state. In fact, a dependency culture did not exist. The proportion of the elderly population on social security has never exceeded 20 per cent, and the proportion of the unemployed on social security has consistently been below 25 per cent.

Victims of Austerity

Since 1998, the community’s access to public housing and the social services has deteriorated. Public spending on housing has fallen by more than half. The costs of schooling have increased. So have medical fees. Price rationing limited access to modern medication for cancer and other seriously ill patients, as well as for the mentally ill.

The elderly and the disabled have faced distressing delays for admission to urgently needed facilities.

  • Almost 23,000 elderly men and women died between 2007 and 2011 while waiting for residential care.
  • The average delay in admission to residential facilities for persons with severe disabilities has ranged from three to six years.


Legacy of Past Policies

Current poverty begins with the policy errors of the past. Since the 1960s, senior officials have cooperated with the business community to block the introduction of schemes which could be classified as social insurance. The Mandatory Provident Fund (MPF) was only introduced in 2000 and thus will not finance a comfortable retirement for the average employee for decades. Unlike almost all advanced economies, Hong Kong has no universal pension, no community- wide health or unemployment insurance.

The educational system has struggled in this century to overcome a shortage of qualified graduate staff and adequate facilities. The shortfalls were the inevitable outcome of postponing the introduction of free, compulsory schooling until 1978.

Worst of all is housing. The government’s retreat from this sector since 2002 has left the community at the mercy of property developers. Supply is inadequate. The housing stock suffers from extensive dilapidation and neglected maintenance. Low-income families and socially- disadvantaged individuals are forced to live in buildings which are often dangerous and squalid. Slums are increasing faster than in other advanced world cities.

The New Poor

Hong Kong now has an ageing population and a post-industrial economy. In the absence of social insurance, the community must fund long-term financial and medical care for the elderly. In this post-industrial economy, the jobs available to those with limited schooling and to persons with disabilities have shrunk. They too will require long-term financial support and social services.

It is not only individual members of these groups who face poverty. Family-based means testing and the government’s drive to expand the private sector’s share in providing social services puts relatives under severe pressure to exhaust their savings and go into debt to cover the (increased) fees and charges.

Thus, from one decade to the next, the disabled and the disadvantaged are deprived of dignity and denied compassion. The eradication of Hong Kong’s shameful poverty will only start in earnest when the government recognises the distress imposed on the needy and the vulnerable by its flawed policies.